NFT Developers Plead Guilty to $400,000 ‘Rug Pulling’, Laundering and Wire Fraud

One NFT the developer was found guilty and another pleaded guilty in a US court to conspiracy to commit wire fraud and money laundering in connection with a $400,000 NFT “rug pull.”

This followed the sale of three NFT collectibles. solana in the name “Immortal Monkeys“”Immortal Lady Monkeys,” and the partial sale of “Immortal Tombstone.” These collections will be printed in 2022 at $5 per piece, said 21-year-old Berman Jerry Nowlin Jr. and returned $135,000 to wallets controlled by 25-year-old Devin Alan Rhoden.

Over the following weeks, the scammers’ total revenue reached almost $400,000, as hundreds of victims invested in the projects; The price of Undead Apes increased to $360 per piece.

According to the Department of Justice (DOJ) report, it is stated that the success of the projects was ensured by “completely false statements”. These included details of “future partnerships with key businesses,” how much capital would be reinvested into the project, and benefits to owners.

In April 2022, just a month after the launch of Undead Apes, scammers began minting 632 “Undead Tombstone” NFTs, which was abruptly halted after the pair ‘abrogated’ the projects. In other words, since all communication with the community was cut off, Discord and Twitter accounts were also deleted.

according to DOJ press releaseThis is considered a scam, which they define as “a cryptocurrency investment fraud scheme in which developers abandon a project, take investor funds, and leave investors with a worthless asset.”

The couple used a crypto mixer Hurricane CashWhich one now banned in the USAto hide where they are sending money. In the statement, the movement between Solana and the funds was emphasized. EthereumThey use a technique called “chain jumping” to confuse those pursuing them. Alabama-based Nowlin then converted the cryptocurrency into US dollars and transferred the money to his bank account.

On Thursday, it was announced that Nowlin was found guilty of conspiracy to commit wire fraud and money laundering related to the rug-pulling. He currently faces a maximum sentence of five years in federal prison, with sentencing set for January 2025.

Rhoden, of Florida, pleaded guilty in May 2024 to conspiracy to commit wire fraud and money laundering. His sentencing will be given later this month.

Edited by Stacy Elliott.